Central Bank builds cheque processing system to supplement national payment

The Central Bank of Belize launched today a new Automated Cheque Processing, which paves the way for the electronic processing of cheques. It means that clearing time will be reduced significantly, thereby accelerating the flow of money. The automated system will also result in robust business activity, according to the bank’s officials. It kicks in on July seventh. News Five’s Duane Moody reports.

Duane Moody, Reporting

The Central Bank of Belize is looking to devise a national payment system for the country. Back in October of 2016, it launched the Automated Payments and Securities Settlements System, better referred to as APS3, as a main component of the reform project. This is to allow for a wider range of payment options including the transfer of funds between banks and accounts with the same day and minutes, respectively. But come July seventh, the system will also provide banking institutions with the service for the automated clearing and processing of cheques by the end of the next day.

“2015, we finished a request for proposal, the banks were a part of that. So we signed a contract with Montran in 2015 and from then onwards, banks knew what they would have to do to get to be ready; in terms of developing formats to be able to support high value payments, formats for low value payments, formats for IFT, [and] formats for cheques. Some of them probably started…every bank had to customize their back office. Every bank had to prepare for this system for October. So they had to develop first the straight through processing, meaning that they can send payments, receive payments of all these formats to the system and receive them as well.”

The automated cheque processing service will transform the entire procedure from deposit of cheques at bank to clearing and settling via the APS3. But these services are not without its cost. So will the banks or their customers take on the respective service charges?

Hollis Parham

Hollis Parham, Director of Finance, Central Bank of Belize

“These fees, what I can definitely say is what the Central Bank is charging the participants, the banks. So once the banks are putting it through, Central bank will charge them at the end of the month. We do anticipate though that the banks will want, will seek, to recover some of these fees. The banks we know are innovative in recovering fees. They don’t necessarily have to do a one-to-one kinda recovery charge; they can do it in their monthly fees…there are numerous ways the banks can do that. But specifically these are fees the Central Bank is charging to a participant bank for using the APS3.”

As to the risks of money laundering and cyber crimes at the national and international levels, screening will be done as is mandated by law.

Sherie Smiling Craig, Director, Project Management

Sherie Smiling Craig

“Also remember that in the law we have the requirements for participation in the system. And the law sets out clearly what the requirements are and then the Central Bank will assess how those are satisfied before granting any kind of licensing for another entity to be a participant in the system. Remember we also have to be considerate of the risk factor that any player will bring, anyone. So we are always cognizant and that is why the law is so structured.”

Rabey Cruz

“The whole world is seeing an increase in cyber attacks and let me tell you that the attacks are continuous and it has been for some time, but it is accelerated now. And the targets are financial institutions, but there has been an increase in terms of the methods used. The Central Bank is also a member of a big organization called Swift, where we make international money transfers. And there’s collaboration at the country level and globally in terms of best practices that must be followed in terms of cyber security.”

Credit Unions and all banks are working towards integrating the APS3 directly. Duane Moody for News Five.

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